4:07 PM
 | 
Dec 06, 2018
 |  BC Extra  |  Politics & Policy

CMS: drug spending growth lowest in five years

Drug spending increased 0.4% in 2017, the lowest growth rate since 2012, according to a report from CMS’s Office of the Actuary. Healthcare spending grew at a rate of 3.9% last year, showing a reduction in growth for the second straight year, while GDP growth accelerated to 4.2% from 2.7% in 2016.

CMS attributed the deceleration in drug spending to slowing growth in the number of prescriptions dispensed, a continued shift to lower-cost generic drugs and slower growth in the volume of some high-cost drugs. Generic drug prices declined and existing brand-name drugs had lower price increases in 2017.

The report found that the slowdown in healthcare spending last year was mostly due to a reduction in use and intensity of hospital care, physician and clinical services, and prescription drugs. Spending for private insurance and Medicaid also slowed in 2017 due to a deceleration in enrollment growth, while Medicare spending was relatively flat.

The report is in line with findings from PBM Express Scripts Holding Co. Inc. (NASDAQ:ESRX), which has also reported a slowdown in per-person drug spending last year. In its 2017 drug trend report, the PBM said that growth rate was 1.5%, the lowest rate increase in 24 years, compared with 3.8% in 2016 (see "Express Scripts Reports Lower Growth Rare in Drug Spending").

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